European Shares To Open Lower On Rate Concerns

(RTTNews) - European stocks may open on a sluggish note Wednesday as investors fret about the outlook for rates and watch closely the latest developments in the Middle East.

Traders further reduced their rate cut expectations by the U.S. Federal Reserve after Minneapolis Fed President Neel Kashkari said he needs to see "many more months of positive inflation data" before he would consider cutting interest rates.

Meanwhile, Iranian-backed Houthis have reportedly fired five anti-ship ballistic missiles from Yemen into the Red Sea, raising concerns over maritime safety and adding to heightened tensions in the Middle East.

Asian stocks were mostly lower, though Chinese markets edged up slightly following moves by city governments to support the property market.

The dollar and Treasury yields held firm as investors looked ahead to the release of key inflation data this week for direction.

On Friday, the U.S. Commerce Department is due to release its report on personal income and spending for April, which includes readings on inflation said to be preferred by the Federal Reserve.

The inflation data could have a significant impact on the outlook for interest rates ahead of the Fed's next monetary policy meeting on June 11-12.

The U.S. economic calendar remains relatively quiet today, although the Fed's Beige Book may attract some attention.

Closer home, German preliminary CPI data as well as consumer confidence figures from Germany, France and Italy may influence trading sentiment later in the day.

Gold traded lower while oil extended overnight gains ahead of an OPEC+ meeting.

U.S. stocks ended mixed overnight as Nvidia shares surged in an otherwise lackluster trading.

The tech-heavy Nasdaq Composite rose 0.6 percent to a new record closing high and the S&P 500 finished marginally higher.

The Dow gave up 0.6 percent after hawkish comments from Minneapolis Federal Reserve Bank President Neel Kashkari and a jump in the 10-year Treasury yield above 4.5 percent following relatively weak 2-year and 5-year auctions.

In economic news, data showed U.S. consumer confidence unexpectedly improved in May after deteriorating for three straight months.

European stocks closed lower on Tuesday as investors reassessed the likely stance of the Fed, ECB and BOE with regard to interest rates.

The pan European STOXX 600 fell 0.6 percent. The German DAX dipped half a percent, France's CAC 40 shed 0.9 percent and the U.K.'s FTSE 100 declined 0.8 percent.